Why people ignore financial education – until they need it most

One of the big challenges of having a financial education offering is getting your users just as excited about it as you are. It’s something we see every day at Money101, given we’re somewhat evangelists for the online learning experience. The problem is that on this side of the fence, we know the benefits of knowledge and capability; the amazing things people can do with their own money once they get it. And through the development process, you get to know the user experience inside out.

Don’t get us wrong – once users know Money101 education, they love it! It’s just a matter of not only getting the word out there, but engaging users on their own terms, through platforms and topics that matter to them. And that requires understanding two important principles.

The four stages of ‘what now?’

The four stages of competence, also known as ‘conscious competence’ or the ‘hierarchy of competence’, is a model of how people learn. It shows how people progress from being totally unaware of something, to mastering knowledge in a way that means they can do it easily – perhaps even multitasking, or teaching others.

The first stage is ‘unconscious incompetence’. Basically, this means that someone doesn’t know how to do something. But they also don’t know that they don’t know. And when presented with the option of learning, they might deny that the outcome (the skill) is useful to them. That’s where the big challenge is. You have limited time and space to capture someone’s attention, when they’ve got a million other things on their mind, and convince them that they should spend time and mental energy on something that they can’t yet see a clear reward for.

The way we help Money101 clients to chip away at that challenge is through engagement content. By creating a link between something a user is conscious of (such as a lifestyle factor or goal they have), and the educational content, we can help get them to that second tier. But more on that later.

Just in the nick of time…

Another thing we’ve got to be conscious of when putting together an education offering is the just-in-time strategy. There’s a lot of formal pedagogical theory behind this, but what it boils down to is getting what you need to know, exactly when you need to know it.

In the context of financial education, this usually means the user getting the information and higher decision-making skills they need right before making an important transaction. For example, someone might learn about home loans once they’ve already saved (some or all of) a deposit, and are ready to make a purchase in the next few months. Or someone who’s looking in to helping an elderly parent move in to an appropriate aged care facility might learn about funding aged care while they’re researching and touring homes.

The only problem with this strategy is that it doesn’t necessarily work for long-term goals where it’s important to start early, such as retirement savings.

Surprisingly though, it can be used effectively to help build upon positive habits over time, such as reinforcing the benefits of budgeting and saving. The key may be as simple as communicating with the user when they’re experiencing a (relatively) temporary immediate problem that’s related to the competency you’re trying to push.  For example, if someone has run out of money before pay day, they may be effectively engaged with a well-placed ad or link offering a more sustainable solution than a cash loan or selling their belongings. Then through the units themselves, the user could be elevated through the second level of the aforementioned hierarchy. In other words, they’d start off thinking they needed a quick fix to a temporary problem, but they’d find out that that there’s much more they should be looking at.

If you’re interested in finding out more about how we help our clients get their users switched on about learning, please contact our Melbourne office – we’d love to arrange a discussion. Or if you’d like to find out more about our engagement content and how it’s delivered, email us for details.